Seylan Bank to issue listed debentures
View(s):Seylan Bank has obtained Colombo Stock Exchange (CSE) approval to issue 10,000,000 Unsecured Subordinated redeemable 5 year Debentures of Rs 100 to raise Rs 1 billion and in the event of over subscription to issue a further Rs 1 billion, taking the total issue to Rs 2 billion. The issue will open on 14th February, the bank said.
The proposed debenture issue will consist of three types of debentures, where a ‘fixed interest rate’ is paid either annually, semi-annually or monthly. The instrument where interest is paid annually will yield a interest rate of 15.50 per cent while the instrument where interest is serviced semi-annually will be at a interest rate of 15.00 per cent and the monthly interest serviced instrument will be at a interest rate of 14.50 per cent.
Seylan said this issue wouldl be one of the first issues to take advantage of the 2013 Budget tax concession, where listed Corporate Debt Securities (debentures) issued after 1st January 2013 will be exempted from Withholding Tax and Income Tax.
“The issue will assist the bank to expand its capital base in order to maintain a healthy capital adequacy ratio in anticipation of ambitious credit growth targets. It will also assist to broad base the Tier – 2 capital base of the bank. The issue will also assist to increase the medium term funding base to match the medium term lending of the bank, while providing investors an opportunity to earn a regular fixed income over the next five years,” it said.
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